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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-820x547.jpeg" alt="" class="wp-image-424188" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-768x513.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-1536x1025.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The bitcoin halving is an event that happens roughly every four years where rewards to miners are cut in halve, effectively limiting supply of the token. S3studio | Getty Images</figcaption></figure>



Bitcoin is nearly a year away from a key technical event — which might be the catalyst for a prolonged climb in the cryptocurrency’s value.



In April or May 2024, bitcoin is expected to undergo its next so-called “halving,” though the exact date is not yet known.



Bitcoin has been rising in the past few weeks in anticipation of the halving, as a potential U.S. Federal Reserve interest rate cut contends with the prospect of sluggish growth and tightening credit conditions resulting from woes in the banking sector.



One bitcoin was worth roughly $30,000 as of Wednesday morning, according to data from CoinGecko. The world’s largest cryptocurrency is up by more than 80% since the start of the year.



Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, said that the bitcoin jump above $30,000 at a time of bank failures and economic uncertainty suggests the cyclical “bottom” for bitcoin is forming.



“This tends to happen a year or so prior to the Bitcoin’s halving event, which is slated next for around April 2024,” Ayyar told CNBC via email.



<h2 class="wp-block-heading" id="h-what-is-the-bitcoin-halving"><a></a>What is the bitcoin halving?</h2>



Bitcoin halvings take place roughly every four years, or every time another 210,000 “blocks” are added to the blockchain. The event cuts the rewards to bitcoin miners — volunteers running specialized equipment to validate transactions on the network and mint new tokens — by 50%. The aim is to reduce the number of new bitcoin unit released into the market.



Currently, bitcoin miners receive 6.25 bitcoin for each block they successfully mine. This means their computer had the right amount of computing power needed to solve the cryptographic puzzles that secure the bitcoin network and prevent it from being compromised by malicious actors.



Once the next bitcoin halving occurs, this reward will be reduced to 3.125 bitcoin.



Backers of the cryptocurrency say this can help push up the price by enhancing bitcoin scarcity.



The maximum number of bitcoins that will ever exist in circulation is capped at 21 million. This is ensured by the halving mechanism, whereby rewards for mining bitcoin will eventually be slashed to $0.



Before the last halving, which took place on May 11, 2020, the price of bitcoin increased by 19% in the preceding 12 months, from $7,191.36 to $8,568.88, according to figures from CCData.



During the halving before that — which occurred on Jul. 9, 2016 — bitcoin rallied 142% compared with the 12 months prior, moving from $269.14 to $651.83.



The first ever halving of Nov. 28, 2012 saw the price of bitcoin balloon by 384% to $12.35 from $2.55, CCData’s figures show.



“Analysing historical Bitcoin halving patterns, it appears that investors often accumulate Bitcoin in the run-up to the halving event, although the exact timing and extent of returns post-halving can differ,” Jamie Sly, analyst at CryptoCompare, told CNBC.



“The accumulation period from the market bottom after the breakout to the halving date has historically spanned at least 500 days.”



Sly added: “This would mean, if we were to assume that the market bottom for this cycle was in November last year (when Bitcoin hit a yearly low of $15,760), then we are only 142 days into the current cycle. This would correlate with the next expected Bitcoin halving date, which is another 378 days ahead.”



<h2 class="wp-block-heading"><a></a>Bitcoin’s post-halving gains</h2>



The bitcoin price tends to spike even higher, in the months that follow halving.



After the halving of May 11, 2020, the cryptocurrency rallied 688.31% in the following 546 days, reaching a then record high of $67,549.14 on Nov. 8, 2021, according to CCData.



The halving before that, which took place on Jul. 9, 2016, saw bitcoin skyrocket 2,824% to a then all-time high of $19,065.71 by mid-December 2017.



Bitcoin had a torrid 2022, defined by the collapses of major companies and projects, from stablecoin terraUSD to crypto exchange FTX.



Rising inflation led to higher interest rates in the U.S. and in other major economies, which in turn caused investors to flee bitcoin and other risky assets.



That has seen prices of several top digital currencies slump sharply from their all-time highs.



Despite its recent ascent to $30,000, bitcoin is still down more than 50% from the highs of November 2021.

107223050-1681209527842-gettyimages-911964384-set04375-29january2018kw0061

Bitcoin is one year away from a major technical event. History suggests the start of another bull run

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107178051-1673549930994-gettyimages-1456025275-dsc00016_176a4086-9135-46a3-884d-f5d89f65d7cb-820x547.jpeg" alt="" class="wp-image-424180" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107178051-1673549930994-gettyimages-1456025275-dsc00016_176a4086-9135-46a3-884d-f5d89f65d7cb-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107178051-1673549930994-gettyimages-1456025275-dsc00016_176a4086-9135-46a3-884d-f5d89f65d7cb-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107178051-1673549930994-gettyimages-1456025275-dsc00016_176a4086-9135-46a3-884d-f5d89f65d7cb-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107178051-1673549930994-gettyimages-1456025275-dsc00016_176a4086-9135-46a3-884d-f5d89f65d7cb-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107178051-1673549930994-gettyimages-1456025275-dsc00016_176a4086-9135-46a3-884d-f5d89f65d7cb-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107178051-1673549930994-gettyimages-1456025275-dsc00016_176a4086-9135-46a3-884d-f5d89f65d7cb-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



Inflation cooled in March as the Federal Reserve’s interest rate increases showed more impact, the Labor Department reported Wednesday.



The consumer price index, a widely followed measure of the costs for goods and services in the U.S. economy, rose 0.1% for the month against a Dow Jones estimate for 0.2%, and 5% from a year ago vs. the estimate of 5.1%.



Excluding food and energy, core CPI increased 0.4% and 5.6% on an annual basis, both as expected.



The data showed that while inflation is still well above where the Fed feels comfortable, it is at least showing continuing signs of decelerating. Policymakers target inflation around 2% as a healthy and sustainable growth level.



A 3.5% drop in energy costs and an unchanged food index helped keep headline inflation in check.



A 0.6% increase in shelter costs was the smallest gain since November, but still resulted in prices rising 8.2% on an annual basis. Shelter makes up about one-third of the weighting in the CPI and is being watched closely by Fed officials.



Used vehicle prices, a major contributor to the initial inflation surge in 2021, declined another 0.9% in March and are now down 11.2% year over year.



Over the past year or so, the Fed has raised its benchmark interest rate nine times for a total of 4.75 percentage points, the fastest pace of tightening since the early 1980s. Officials initially dismissed inflation as transitory, expecting it to fall as pandemic-related factors dissipated, but were forced to play catch-up as price increases proved more durable.



One key area the central bank has targeted is the labor market. A shortage of workers had helped push up wages and prices, a situation that has eased somewhat in recent months.



In March, nonfarm payrolls increased by 236,000, the smallest gain since December 2020, and average hourly earnings rose at a 4.2% annual pace, the lowest level since June 2021.



The Fed is hoping it can calibrate policy so that the slowdown it is trying to engineer in the labor market doesn’t tip the economy into recession. Gross domestic product growth is tracking at a 2.2% annualized pace in the first quarter, according to Atlanta Fed data, though many economists expect a contraction to come later in the year.

107178051-1673549930994-gettyimages-1456025275-dsc00016_176a4086-9135-46a3-884d-f5d89f65d7cb

U.S. Inflation rises 0.1% in March, less than expected

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107222994-1681198621846-gettyimages-1242239375-Coastal_Tidal_Flat_Energy_Industry_In_China-820x461.jpeg" alt="" class="wp-image-424173" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107222994-1681198621846-gettyimages-1242239375-Coastal_Tidal_Flat_Energy_Industry_In_China-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107222994-1681198621846-gettyimages-1242239375-Coastal_Tidal_Flat_Energy_Industry_In_China-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107222994-1681198621846-gettyimages-1242239375-Coastal_Tidal_Flat_Energy_Industry_In_China-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107222994-1681198621846-gettyimages-1242239375-Coastal_Tidal_Flat_Energy_Industry_In_China-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107222994-1681198621846-gettyimages-1242239375-Coastal_Tidal_Flat_Energy_Industry_In_China-1536x863.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107222994-1681198621846-gettyimages-1242239375-Coastal_Tidal_Flat_Energy_Industry_In_China-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Solar was the fastest-growing source of electricity for the 18th consecutive year, the report said, rising by 24% year-on-year and adding enough power to meet the annual electricity demand of South Africa. Future Publishing | Future Publishing | Getty Images</figcaption></figure>



Record growth in wind and solar last year pushed worldwide electricity generation to its cleanest-ever level, a report found, reflecting a renewable energy boom that researchers say could herald the “beginning of the end of the fossil age.”



The analysis published Wednesday by independent climate think tank Ember found that 12% of the world’s power came from solar and wind in 2022, up from 10% of global electricity generation in 2021.



Solar was the fastest-growing source of electricity for the 18th consecutive year, the report said, rising by 24% year-on-year and adding enough power to meet the annual electricity demand of South Africa.



The report found that the increase in wind generation, which added 17% in 2022, could have powered almost all of the U.K.



“We are entering the clean power era,” said Małgorzata Wiatros-Motyka, senior electricity analyst at Ember and lead author of the research. “The stage is set for wind and solar to achieve a meteoric rise to the top. Clean electricity will reshape the global economy, from transport to industry and beyond.”



Wiatros-Motyka added, “A new era of falling fossil emissions means the coal power phasedown will happen, and the end of gas power growth is now within sight.”



<h2 class="wp-block-heading" id="h-much-more-needs-to-be-done"><a></a>‘Much more needs to be done’</h2>



Researchers said that the analysis — which was based on electricity data from 78 countries last year and represents 93% of global power demand — provides the first accurate picture of the electricity transition in 2022.



It shows that more than 60 countries now generate over 10% of their electricity from wind and solar.



Renewables and nuclear sources were collectively found to have accounted for 39% of global electricity generation in 2022 — in a new record high.



Despite this progress, researchers said that the dramatic build-out of wind and solar was still not fast enough to fulfil all of the world’s increasing electricity needs. Consequently, the report noted that coal and other fossil fuels met the remaining gap, driving up emissions to a new record high.



Coal, the world’s dirtiest fossil fuel, was found to be the single largest source of electricity worldwide last year, producing 36% of global power.



Burning fossil fuels, such as coal, oil and gas, is the chief driver of the climate emergency.



“Much more needs to be done to ensure that developing countries are not left behind and locked into high carbon futures,” said Damilola Ogunbiyi, CEO and special representative of the U.N. Secretary-General for Sustainable Energy for All.



Ogunbiyi said the fact that coal power remained the single largest source of electricity worldwide last year reaffirmed the point that the power sector is off track to meet net-zero targets. “The deployment of wind and solar needs to be massively and urgently accelerated.”



<h2 class="wp-block-heading"><a></a>Have power sector emissions peaked?</h2>



The Ember report said that 2022 may come to mark the peak of electricity emissions and the final year of fossil power growth, with clean power set to meet all demand growth in 2023.



Analysts projected a 0.3% dip in fossil generation this year, with steeper falls expected in subsequent years, as wind and solar deployment accelerate.



The International Energy Agency said last year that the electricity sector needs to move from being the highest-emitting sector to being the first sector to reach net zero by 2040 — if the global economy is to decarbonize by the middle of the century.



For this to happen, analysts at Ember said, wind and solar must account for 41% of the global power mix by 2030 — a sharp rise from the 12% observed in 2022.



Li Shuo, senior policy advisor at Greenpeace East Asia, described China as “the 800-pound gorilla when it comes to the global power sector.”



“This is not only because of China’s sheer scale, but also a concerning trend of its electricity sector development. China has no doubt been leading global renewable energy expansion. But at the same time, the country is accelerating coal project approval,” Li said.



“This won’t carry the country far to truly decarbonize. Rapid power sector reforms are needed to put the country back to the carbon neutrality vision it has set for itself.”

107222994-1681198621846-gettyimages-1242239375-Coastal_Tidal_Flat_Energy_Industry_In_China

‘Entering the clean power era’: Wind and solar generated a record amount of global power in 2022

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/105964618-1560376221bitcoin-1170x463-1-820x461.jpg" alt="" class="wp-image-424146" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/105964618-1560376221bitcoin-1170x463-1-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/105964618-1560376221bitcoin-1170x463-1-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/105964618-1560376221bitcoin-1170x463-1-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/105964618-1560376221bitcoin-1170x463-1-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/105964618-1560376221bitcoin-1170x463-1-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/105964618-1560376221bitcoin-1170x463-1.jpg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



<a href="https://www.cnbcafrica.com/quotes/btc=x/">Bitcoin</a> climbed on Monday evening, topping the key psychological level of $30,000 as investors awaited key inflation data later in the week that could steer crypto prices.



The largest cryptocurrency by market cap rose 7% to $30,193.25 for the first time since June, according to Coin Metrics. <a href="https://www.cnbcafrica.com/quotes/eth=x/">Ether</a> advanced more than 3.5% to $1,925.11 for the first time since August as investors awaited the Ethereum network’s latest tech upgrade, scheduled for Wednesday.



Now that bitcoin has touched $30,000, a move into the mid- to high-30s will be “likely” if it pushes through with conviction and would “force short speculators to cover and buy instead,” said James Lavish, managing partner at the Bitcoin Opportunity Fund. “Some investors are trying to get positioned ahead of that,” he said.



Traders are likely speculating that Wednesday’s consumer price index number “could come in at a level that gives the Fed reason to think about pausing raising rates in the next meeting, thereby giving a boost to assets like bitcoin,” Lavish added.



Investors are also watching the latest reading on the producer price index, due out Thursday.



Cryptocurrencies have been rallying this year. Monday night’s action brings bitcoin’s year-to-date gains to more than 80%, while ether has now added 60% for the year so far. Price moves for the two crypto assets have historically tracked relatively in line on a percentage basis, but the top two crypto assets “decoupled” in March, thanks to a “flight to quality” in bitcoin following bank closures.



Nevertheless, the two cryptocurrencies remain somewhat correlated for the time being and macro drivers continue to influence both assets. The upcoming inflation data will be key in determining if or when the Fed will pause or put an end to its rate hiking campaign.



Meanwhile, ether has been climbing ahead of its planned “Shanghai” tech upgrade, which is expected to bring a wave of negative sell pressure on the market as previously locked funds on Ethereum are released over the next few weeks.

105964618-1560376221bitcoin-1170×463-1

Bitcoin tops $30,000 for the first time since June ahead of key inflation data; ether nears $2,000

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107221437-1680748898943-gettyimages-1245834621-AA_27122022_1004249-820x462.jpeg" alt="" class="wp-image-424113" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107221437-1680748898943-gettyimages-1245834621-AA_27122022_1004249-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107221437-1680748898943-gettyimages-1245834621-AA_27122022_1004249-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107221437-1680748898943-gettyimages-1245834621-AA_27122022_1004249-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107221437-1680748898943-gettyimages-1245834621-AA_27122022_1004249-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107221437-1680748898943-gettyimages-1245834621-AA_27122022_1004249.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">WASHINGTON D.C., UNITED STATES &#8211; DECEMBER 26: The International Monetary Fund (IMF) building is seen in Washington D.C., United States on December 26, 2022. (Photo by Celal Gunes/Anadolu Agency via Getty Images) Anadolu Agency | Anadolu Agency | Getty Images</figcaption></figure>



The International Monetary Fund said in a Wednesday report that global tensions could disrupt overseas investment and eventually lead to a long-term loss of 2% of the world’s gross domestic product.



Companies and policymakers across the globe are exploring ways to make their supply chains more resilient by “moving production home or to trusted countries,” the IMF warned in its report, adding that this will lead to fragmenting foreign direct investment.



The IMF pointed to recent bills adopted against the backdrop of rising tensions between the U.S. and China, such as Washington’s Chips and Science Act. Japan recently imposed its own restrictions on 23 types of semiconductor manufacturing equipment, joining U.S. efforts to curb China’s ability to make advanced chips.



A recent survey conducted by the American Chamber of Commerce in China similarly showed a shift of foreign direct investment away from China. Less than half of its respondents ranked China as a top three investment priority for the first time in 25 years.



IMF economists said that money is now flowing into what are considered “geopolitically close countries.” The rise of “friend-shoring” could hurt less developed markets the most, the organization said.



“Emerging market and developing economies are particularly affected by reduced access to investment from advanced economies, due to reduced capital formation and productivity gains from the transfer of better technologies and know-how,” IMF economists including Jae-bin Ahn wrote in the report.



This comes as tensions increase between China and the United States. After a recent meeting between U.S. House Speaker Kevin McCarthy and Taiwanese President Tsai Ing-wen in California, Beijing made veiled threats, pledging to take “resolute actions” in response to the “provocation.”



The IMF economists added that developing economies are more vulnerable to this shift in foreign direct investment as “they rely more on flows from more geopolitically distant countries.”



Even if more powerful countries reap the benefits they seek through heightened tensions, those gains could be partially offset due to spillover from weaker external demand, IMF warns.



“A fragmented world is likely to be a poorer one,” the IMF economists wrote.



<h2 class="wp-block-heading" id="h-vulnerable-to-shocks"><a></a>Vulnerable to shocks</h2>



IMF argues that while “reconfigured” supply chains according to geopolitical alliances may benefit a country’s national security interests and secure an upper hand against competitors, there are also consequences.



“Friend-shoring to existing partners will often reduce diversification and make countries more vulnerable to macroeconomic shocks,” IMF economists wrote in a note. The organization argued for more supply diversification in global trade a year ago, saying that a “more diversified global value chains could help lessen the impact of future shocks.



The organization revisited that argument, saying that even for developed economies, overseas firms ramping up competition “spurs domestic enterprises to be more productive.”



It warned that policy uncertainty should be minimized, as it “amplifies losses from fragmentation.”



“In a fragmented world with heightened geopolitical tensions, investors may worry that nonaligned economies will be forced to choose one bloc or the other in the future, and such uncertainty could intensify losses,” IMF wrote.

107221437-1680748898943-gettyimages-1245834621-AA_27122022_1004249

IMF says U.S-China tensions could cost the world about 2% of its output

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107220710-1680673592628-gettyimages-1180313082-56201573023836_pic_hd-820x462.jpeg" alt="" class="wp-image-424096" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107220710-1680673592628-gettyimages-1180313082-56201573023836_pic_hd-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107220710-1680673592628-gettyimages-1180313082-56201573023836_pic_hd-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107220710-1680673592628-gettyimages-1180313082-56201573023836_pic_hd-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107220710-1680673592628-gettyimages-1180313082-56201573023836_pic_hd-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107220710-1680673592628-gettyimages-1180313082-56201573023836_pic_hd.jpeg 929w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Chinese President Xi Jinping and French President Emmanuel Macron are meeting this week. Pool | Getty Images News | Getty Images</figcaption></figure>



European officials are traveling to China in the hope of persuading Beijing to denounce Russia’s invasion of Ukraine and cool its recent kinship with the Kremlin.



The 27-member bloc walks a tightrope, looking to develop economic ties with China but also reaffirming a close political and cultural relationship with the United States. This has became particularly difficult with the U.S. administration ramping up its anti-Beijing rhetoric and, even more so, in the wake of Russia’s invasion of its neighbor.



“It is clear that our relations have become more distant and more difficult in the last few years,” Ursula von der Leyen, the president of the European Commission, said in a speech Thursday ahead of her trip to Beijing this week.



“We have seen a very deliberate hardening of China’s overall strategic posture for some time. And it has now been matched by a ratcheting up of increasingly assertive actions,” she added.



Von der Leyen is traveling to Beijing alongside France’s President Emmanuel Macron this week. Spain’s Prime Minister Pedro Sanchez met China’s President Xi Jinping last week. Europe’s top foreign affairs diplomat, Josep Borrell, is heading to China next week.



“A lot of Europeans [are] going to China,” Borrell said Tuesday, adding that they have a clear message.



“Its position on Russia’s atrocities and war crimes will determine the quality of our relations with Beijing. In the meantime, the European Union stands united and our transatlantic community remains also united,” he said.



China has failed to condemn Russia’s onslaught in Ukraine. In a visit to Moscow in March, China’s leader Xi Jinping referred to his Russian counterpart as a dear friend.



Beijing in February proposed a 12-point peace plan for the Ukraine war. The plan fails to specify whether Russia needs to leave Ukrainian territory for a deal to be completed. Ukraine has made it clear it will not agree to any peace deal that does not involve regaining full control of its territory, including Crimea which the Kremlin annexed in 2014.



“Europe has converged quite a lot to the position of the United States,” Niclas Poitiers, a research fellow at Bruegel, told CNBC’s “Squawk Box Europe” Monday, adding that Brussels wants to reduce dependencies on China. The EU was heavily reliant on Russia for energy and it now wants to avoid similar mistakes with other parts of the world.



“Overall, there is a consensus that we need to do something about our overreliance on China and ensure they don’t blackmail small member states,” Poitiers said.



A recent example of the increased convergence between the U.S. and the EU is the decision in the Netherlands to go ahead with export restrictions to China, following a move stateside aiming to curb Beijing’s access to the most cutting-edge microchip production.



In addition, the United States has also became Europe’s main provider of liquefied natural gas (LNG) last year as the bloc looked to phase out Russian hydrocarbons.



There’s also an increased, though natural, cooperation between EU nations and the U.S. on security matters given most of them are also members of NATO.



“U.S. &#8211; European Union relations have never been stronger or more important to advance our shared interests,” U.S. Secretary of State Antony Blinken said in Brussels Tuesday.



Blinken is meeting his fellow NATO counterparts this week, where they will discuss further support for Ukraine as well as ramping up financial contributions to the military alliance.



But moving closer to the U.S. is not an easy decision for European leaders. In 2022, China was the largest source of EU imports and the third largest buyer of EU goods, highlighting the economic importance that Beijing has for Europe. This is particularly relevant when economic growth in the EU is vulnerable to the ongoing war in Ukraine.

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